Poloz was 'quite disappointed' in the economy
1)
The Bank of Canada is downright dour or economic growth. The 2015 growth forecast was lowered to 1.1% from 1.9% and the 2016 forecast to 2.3% from 2.5%. The consensus estimates are 1.5% and 2.1%, respectively. It's rare for a central bank to be more bearish than economists.
2)
There's no promise of further moves or monetary policy. Poloz said the BOC believes it will "unnecessary" to take more action in September or further out in the future. He left a caveat that the situation could change along with the data or if oil prices fall, he also said today's decision wasn't close so there is little resistance to another move if needed.
3)
They were wrong about oil. They anticipated a bigger bounce in oil prices and thought oil companies would continue to invest in the oil sands. Instead, companies will cut investment by 40% this year rather than the 30% the BOC anticipated.
4)
The weaker Canadian dollar didn't bring the kind of boost Poloz expected. He said he was 'quite surprised' that non-energy exports failed to improve. That's a particular blow to Poloz because he came to the BOC from Export Development Canada and should have extensive contacts among export firms.
5)
The toolkit is flush. Poloz said rate cuts, forward guidance and quantitative easing are options if the economy struggles. That kind of talk can send USD/CAD to stratospheric levels.
